Dream World of Finance Ministry
Posted on June 8th, 2016

Paul Fernando Colombo 07 Courtesy The Island


Some days ago the Ministry of Finance (MoF) published advertisements in some English dailies trumpeting the achievements of the Yahapalanaya government relating to prices. Closer examination of these numbers shows that they need to be taken with a large pinch of salt.

As students, we were taught that comparisons should be between like and like, not apples and pears. The MoF compares the price of LP 95 Petrol in 2014 with that of LP 92 now. In September 2014 the price of LP 95 was reduced to Rs. 165 according to the Petroleum Corporation website while LP 92 was reduced to Rs. 157; the current prices are Rs. 128 and Rs. 117 respectively.

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The MoF states the price range for Rice in 2014 was Rs. 60 – 150; not stating what types were included in the computation. The Department of Census & Statistics (DC&S) weekly listing of key prices in the Colombo markets includes three types of Rice – Samba, Raw Red and Nadu – the prices of which ranged from Rs. 57 to Rs. 100 during 2014. It would seem that the MoF has included some expensive type of rice (Basmathi?) in the list for 2014, but very conveniently omitted this from the list for ‘Now’. The range shown for these three types of rice by the DC&S in the second week of April is Rs. 55 to Rs. 110.

There are other discrepancies – LPG was increased to Rs. 2,396 in January 2013 and subsequently reduced twice, by Rs. 250 each time, in October 2014 and December 2014, to Rs. 1,896 (Hiru News, 6th December 2014). So the ‘maximum’ Yahapalanaya can claim is a reduction of Rs. 500 (not Rs. 1,300 as implied by the MoF) to the current rate, which is Rs. 1,346 (not Rs. 1,350 as shown by the MoF). Some examples are tabulated below.

The ‘information’ being disseminated by the MoF supports the phrase (wrongly attributed to both Benjamin Disraeli and Mark Twain) that ‘there are lies, damned lies and statistics’.

Some Yahapalanaya achievements have been conveniently ignored by the MoF – Milk has gone up in price from Rs. 75 to Rs. 100, Butter from Rs. 240 to Rs. 340. The government group in Parliament is 156 out of which 92 (59%) are Ministers, Deputies or State Ministers; yet when an appropriation bill was voted on recently only 31 (less than 20%) were present! Yahapalanaya takes the expression ‘ … to forgive is divine’ to extremes – not only are those who worked tirelessly to prevent Yahapalanaya coming into power forgiven, they are offered lucrative posts with increased allowances and benefits.

However, the largesse of the Yahapalanaya government is best seen by the massive ‘benefits’ they have heaped on the senior citizens! In January 2015 a newly introduced fixed deposit scheme, for senior citizens to get interest of 12% on deposits of Rs. 2.5 million (maximum), was unceremoniously scrapped before most of us had sufficient time to organise the funds to invest. This scheme was replaced several weeks later by one which permitted a maximum of Rs. 1 million at 15%. 50% of the interest offered in January was therefore ‘lost’ and we continue to lose.

To add to our benefits, not only has VAT been increased to 15%, it is now applicable to hospital charges such as lab tests, channelling charges and presumably on various other items included in hospital bills. Thus a room in one hospital that cost Rs. 8,500 in 2014 could now cost Rs. 12,075 (42% up) as the hospital has recently increased the room charge to Rs. 10,500 to which VAT will be added. Charges for Medical Officers and Nursing Fees will probably also attract VAT, so going to a private hospital will be a luxury the ordinary person cannot afford. Nothing has happened to the promises to provide ‘affordable medical care for everybody’, and ‘good drugs at reasonable prices for all’ remains just a load of hot air. The National Medicinal Regulatory Authority appears to be stillborn with the appointed members, unable to contend with the minister, his relatives and friends, resigning.

Although according to him we have as good doctors as any other country, the minister went to Singapore for a heart operation most probably paid for out of our taxes. Mr. Rambukwelle’s ‘foot’ operation is said to have cost us Rs. 200 million; no doubt Mr. Senaratne’s heart operation will cost us a ‘foot’ or maybe two and possibly an arm or two as well.

Meanwhile, the budget that was passed in December 2015 that would have granted some relief (?) to senior citizens, (additional interest on Rs. 500,000) languishes in some filing cabinet or other in the MoF! Based on the rate for a foot operation, with this benefit (if the budget is ever implemented!), one may not even be able to get a toe operated on!

I wonder whether these changes constitute a subtle attempt to address the problem of the rapid ageing of the population – the seniors will soon not be able to afford to pay doctors’ charges, for essential medicines or hospitalisation and will be carted-off to Kanatte earlier than expected.

The MoF advertisement should have been headed ‘ Some have woken up from a deep slumber …’ , the Ministry of Finance ‘Dreams On!’.

Paul Fernando

Colombo 07

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